America Is Still No1 ..

[psycopk]

 

CAMBRIDGE — Headlines around the world trumpeted a watershed moment for the global economy. As the Financial Times put it, “China poised to pass U.S. as world’s leading economic power this year.” This is a startling development — or it would be if the claim were not essentially wrong. In fact, the United States remains the world’s largest national economy by a substantial margin.

The story was based on the April 29 release of a report from the World Bank’s International Comparison Program. The ICP’s work is extremely valuable. I eagerly await and use their new estimates every six years or so, including to look at China.

The ICP data compare countries’ gross domestic product using purchasing-power-parity (PPP) exchange rates, rather than market rates. This is the right thing to do when looking at real (inflation-adjusted) income per capita in order to measure people’s living standards. But it is the wrong thing to do when looking at national income in order to measure the country’s weight in the global economy.

The day when China surpasses the U.S. remains in the future.

 

The bottom line is that, by either criterion — per capita income (at PPP exchange rates) or aggregate GDP (at market rates) — the day when China surpasses the U.S. remains in the future. This in no way detracts from the country’s impressive growth record, which, at about 10% per year for three decades, constitutes a historical miracle.

At market exchange rates, the American economy is still almost double the size of China’s (83% larger, to be precise). If the Chinese economy’s annual growth rate remains five percentage points higher than that of the U.S., with no significant change in the exchange rate, it will take another 12 years to catch up in total size. If the differential is eight percentage points — for example, because the renminbi appreciates at 3% a year in real terms — China will surpass the U.S. within eight years.

The PPP-versus-market-exchange-rate issue is familiar to international economists. This annoying but unavoidable technical problem arises because China’s output is measured in renminbi USDCNY, +0.09%  , while US income is measured in dollars DXY, -0.38%  . How, then, should one translate the numbers so that they are comparable?

The obvious solution is to use the contemporaneous exchange rate — that is, multiply China’s renminbi-measured GDP by the dollar-per-renminbi exchange rate, so that the comparison is expressed in dollars. But then someone points out that if you want to measure Chinese citizens’ standard of living, you have to take into account that many goods and services are cheaper there. A renminbi spent in China goes further than a renminbi spent abroad.

For this reason, if you want to compare per capita income across countries, you need to measure local purchasing power, as the ICP does. The PPP measure is useful for many purposes, such as knowing which governments have succeeded in raising their citizens’ standard of living.

Looking at per capita income, even by the PPP measure, China is still a relatively poor country. Though it has come very far in a short time, its per capita income is now about the same as Albania’s — that is, in the middle of the distribution of 199 countries.

[dkchinnari]

becoz of cbn? 

[Hyderabad_Nawab]

USD : World's De Facto Currency Unnani rojulu US Eppudu No.1 e...;)

[kiladi bullodu]

Yes it has most number of strip clubs in the world

[Legends]

Notlu guddukuntu pothe No.1 ea desam aina untadi. Financial Crisis vochchinappudalla veellaki $$ lu guddukuntaru. Paiga veella $$ value eppudu other currency kante ekkuva enduku untadi ? return vallu $$ ea expect chestharu, inturn gold, silver, oil roopam lo kaadu. Ade migatha deshalu eadaina takattu petti vodilinchukuntaru. Anduke veellu No.1 ani boasting. Migatha veella economy run chesedi non americans anna vishayam marchipokapothe chaalu. Phulkas

 

 

[Gajji_maraja]

lolbob fans ekuva kadha US lo andukani rich lol

[Legends]

Yes it has most number of strip clubs in the world

 

Nuvvu manchi timing maintain chesthav. Okka dialogue tho DB lo brathikesthunnav po 

[BillMarkSteve]

Not agreed

Japan's richest man...India and China are the world smartest super power countries ani cheppadu ani...monna recent ga chandra babu naidu cheppadu....:)

[powerstar02]

as per GDP india china can never be rich man

[Hyderabad_Nawab]

Not agreed

Japan's richest man...India and China are the world smartest super power countries ani cheppadu ani...monna recent ga chandra babu naidu cheppadu.... :)

Is this News Updated in PPT or TDP FB Page..?..

[sigsegv]

god bless america 

[nenokkadineno1]

mana nalla thanam teesthe manam ease ga 30 deggara untaam.....

[sigsegv]

mana nalla thanam teesthe manam ease ga 30 deggara untaam.....

yeah .. but that is next to impossible